Mongolia Democratic Party Confident of Victory After Voting

July 2 (Bloomberg) -- Mongolia’s Democrats expressed
confidence they will form the next ruling party after elections
for parliament, even as officials ordered another vote in two
districts and early results showed no group won a majority.

The Democratic Party said it won 36 of 76 seats in the
State Great Khural, according to a statement posted on its
website yesterday. The election commission, which confirmed that
the party won more seats than any other group, ordered new polls
in two districts June 30 after winning candidates failed to
garner enough ballots.

“The DP is definitely going to be the ruling party,” it
said in the statement. “The main indicator of a democratic
country is free elections. The people gave us their trust. It
means that Mongolians want to live and develop as in other
countries.”

The Democrats and the Mongolian People’s Party are
grappling for control of a legislature that will have a say over
how the country uses the profits from an estimated $1.3 trillion
in gold, copper and coal reserves. Mining companies led by Rio
Tinto Group have invested billions of dollars in the nation of
about three million people.

Mongolia’s next parliament will need to help reform the
judicial system, fight corruption and pass a set of new laws on
mining and land use that seek greater protection for the
environment among other measures, President Tsakhia Elbegdorj
said in a June 29 interview.

Sharing Wealth

One government plan to share Mongolia’s wealth is to give
each citizen one preferred share of Erdenes MGL, a state holding
company that owns more than a dozen of the nation’s biggest
mineral deposits.

The distribution of Erdenes MGL shares has been approved by
parliament and at the cabinet level, Elbegdorj said. He said he
is “cautious” about the plan and wants it to involve only one
of Mongolia’s major deposits, the 6-billion-ton Tavan Tolgoi
coal field.

Mongolia doubled state spending in real terms to 6.3
trillion tugriks ($4.7 billion) last year as the government
offered cash handouts to the population to meet previous
election pledges and added more public sector jobs, the
International Monetary Fund said in December. The cash caused
food prices to jump 31 percent in April from a year earlier.

Lost Faith

The handouts haven’t had a lasting impact, said Puruvdorj,
a 73-year-old pensioner in Nalaikh, a coal mining town close to
Ulan Bator. The number of new bars and karaoke salons has surged
in the town, where Mongolia’s coal exploration began in the 20th
century, he said.

“There are rivers of alcohol, it is flourishing, but
there’s nothing concrete,” Puruvdorj said. “I’ve lost faith in
the government and parliament.”

The next government will narrow the cash payments to five
“most needy” groups, Elbegdorj said -- the elderly, children,
the disabled, students and young mothers. The government may
also give tax exemptions to small and medium-sized businesses,
he said.

Even as the Democratic Party declared victory, the
Mongolian People’s Party could also seek to team up with other
partners. The two could, as in the previous government, join
together for a larger coalition, though the Democrats appear
reluctant to do that for now, according to Jackson Cox, chief
executive of the Ulan Bator-based consultancy Woodmont
International.

Final Results

“While Mongolian election officials are close to resolving
the final election results, the process of Mongolia’s political
leaders to cobble together a coalition so that a new government
can be formed is just beginning,” Cox said.

The Democrats have several choices to reach the 39-seat
threshold, and the MPP “has options of its own to form a
formidable bloc in the new parliament,” Cox said.

The results from the June 28 vote are preliminary until
each election district approves them, the General Election
Commission said yesterday. At the moment, the Democrats won 22
seats and the MPP took 19 of the 48 being contested in the
direct elections, according to the commission. Twenty-eight
seats are awarded via proportional representation.

The Justice Coalition, which includes former President
Nambaryn Enkhbayar’s party, won four seats and the last three
went to independents, he said.